the proposed action raises no competitive issues or where it is clearly procompetitive.

We think that the most effective and workable approach is the one we proposed in our statement on S. 382. There we said that the application of the procompetitive standard should be limited to major agency actions as defined by the agency. The agency's decision as to whether one of its actions is major would be subject to judicial review. That approach appears to have worked well in the environmental area. Further, we think that the guidelines we developed for the implementation of the NEPA could serve as a model for regulation 29/ implementing title II. Those guidelines describe some of

the factors to be taken into account in determining whether an action is a major one. They also list classes of actions which have the potential for a significant "environmental" impact and classes of actions where no "environmental" issues are present. They describe the type of information that an applicant must present indicating the presence or absence of any "environmental" impact. While those are just a few examples, we think they illustrate the similarity in approach between the requirement that we consider the environmental impact of our major agency actions and a requirement that we consider the anticompetitive impact of such actions.

29/ 49 C.F.R. 1108.1 et seq.

Naimally, we would expect the Attorney General to

participate in the development of the regulations implementing tile II, as well as individual proceedings involving issues

of competition.

Before closing, I would like to mention briefly the

other sections of title II.

Section 602 (b) exempts from subsection (a) certain agency actions involving entry and the production or distribution of goods or services, if the agency's actions are based on matters of health or safety. We support such an exemption, since it attempts to save decisions based on non-economic factors from a procompetitive analysis. However, we would suggest that the exemption be expanded to include "fitness". Before issuing a certificate or permit to a carrier to provide service, the Commission must find that the carrier is "fit, willing, and able" to provide such service and to 30/ comply with the statutes and our regulations. That finding

is separate from the finding that the Commission must make with respect to "public convenience and necessity" or other similar standards. Safety is only one of the factors that the Commission considers in determining whether the carrier is "fit, willing, and able". We also must take into account the

30

49 U.S.C. 10922 and 10923.

carrier's financial fitness, its past performance, its

ethical integrity, and whether it has adequate insurance.

Those are matters which should be taken into account separate from economic considerations. We think they fit into the

same category as health and safety, and, thus should be

covered by section 602(b).

There is one other exemption which we believe should be added to title II. We do not believe that title II was intended to affect an agency decision based on a finding that the applicant did not present a prima facie case. If an applicant fails to meet statutory deadlines or forwards an incomplete application, an agency should not have to consider competition before rejecting the application. believe that is true, regardless of whether the decision is one with respect to entry, rates, or financial matters. We suggest title II be amended accordingly.

We

Subsections (a), (b), and (c) of section 602 are slightly modified versions of sections 4(a), 4(b), and 4 (d), respectively, of S. 382. In commenting on S. 382, we suggested only minor changes in those sections. Rather than repeating those suggestions here, we wish to refer you to page 13 of our statement on S. 382.

In

Similarly, subsections (a) and (b) of section 604 are nearly identical to sections 6 (c) and 6 (d) of S. 382. our comments on S. 382, we supported the requirement that

legislation.

We also discussed the similarity be seen that review and the current review of our regulations prompted by President Carter's 1978 executive order aimed at improving

government regulations.

31/

Our comments on sections 6 (c)

and 6 (d) are on pages 15 through 17 of the statement on S. 382. I hope that our comments on title II will be helpful to you. I would be glad to answer any questions you may have on the statement or other matters.

Attachment

Commissioner Stafford and Commissioner Gresham were

absent and did not participate.

Commissioner Trantum submitted the following separate ex

pression to Chairman O'Neal:

I believe S. 1291 should be strongly supported by

the Commission. If the following points are not

incorporated into the testimony, show them as a separate expression.

With respect to your concerns, I would make the following points:

(1) A "procompetitive standard" would seem to be consistent with the Commission's apparent direction of

31/ See Ex Parte No. 350, Improving Commission Regulations, served July 18, 1979 and Executive Order 12044, Improving Government Regulations, signed March 23, 1978.

valexing halos of entcy for motor cauriers. Just because individual cases are generally small, does not appear to be a forceful argument against the application of a procompetitive standard. The fact that we are currently approving 98% of motor carrier entry applications prevents the standard from being an administrative burden. The intent of this legislation is to apply the standard only when entry is being limited.

(2) I strongly disagree with your economic analysis contained in the second full paragraph on page 4. Optimal economic efficiency in the trucking industry has little to do with size. Effective and innovative management is the key--and this can be found in both large and small trucking companies. If you wish, I would be happy to discuss this point at length with you and/or your staff.

(3) I favor leaving in the language "notwithstanding any other provision of law." As indicated in footnote number one, page 5 of the testimony, the courts

have already made it

role in entry cases.

clear that competition has some

Without this language, the procom

petitive standard would merely repeat what the Court has already said.

(4) The standard should be applied to fitness findings rather than exempting them as proposed on page 24. While ICC fitness findings do not currently have a large